Thoughts on the Government-Granted Privilege for Cubans

I want to preface these thoughts by letting you know that I have never been to Cuba. (Although I hope to make it out there by the end of June this year.) I am a second-generation Cuban, with only the narratives of my immigrant family members that have largely shaped my identity. I have never had to live behind the walls of a country where basic freedoms, like speech and religion, are undermined by an oppressive communist government. Having the United States as my country of birth is, undoubtedly, a blessing. It is a country in where most of my life I, like most Americans, only needed to remember to not take these freedoms for granted when someone would mention our troops or it was a military holiday. It wasn’t until being trained in the economic way of thinking that I was able to really see the importance of institutions that, rightly, put these basic human rights on a pedestal.

Nonetheless, take my thoughts on the recent events with a grain of salt, and know that I’m just trying to piece together my own stance on the issue, due to my sensitivity to both sides of the argument.

The “Winners” and Losers

Often, what is played out in politics are zero-sum games, in which one side wins and the other side loses. With President Obama’s decision to extinguish the wet foot/dry foot policy (WFDF), it’s easy to see who are the losers, but many are having a hard time finding out who are the winners.

Some say that the Castro regime, currently being run by Raul Castro, are the winners. This policy was to be used as a literal (and metaphorical) escape valve for the Cuban people oppressed by a communist government. Now, we see statements saying that the “announcement will only serve to tighten the noose the Castro regime continues to have around the neck of its own people.” On the other hand, other officials say that the “the aim of the policy is to treat Cuban migrants in a manner consistent to migrants who come here from other countries…equalizing immigration policies… as part of the overall normalization process with Cuba.” So, “everyone” wins.

The losers with this policy measure are obviously those that were already on their way. Those that had put up thousands of dollars to make their trip over to the United States. Those that are deep in the jungles of Cuba, building their wooden vessels in which they would use to traverse the Straits of Florida in an attempt to make it to the Florida shore. Those that are making their way up through Central America, like some of my own family members have done, in hopes of making it to the U.S./Mexican border. Also, those that have suffered, or continue to suffer, from the state’s despotism and injustices in regards to human rights.

Incentives, Institutions, and Cubans, Oh My!

That being said, it does seem like it was time to roll this particular program back. It has created perverse incentives that are arguably netting losses as opposed to benefits. We often harp that other policies and regulations are outdated, but why not this one? This one has run for over 20 years, which has allowed for substantial amounts of rent seeking and the creation of exploitative secondary, or black, markets. Market transactions will happen, but how they happen is due to the particular institutions put in place. For example, people will always produce, sell, and purchase drugs. But, by making it illegal, we see a slew of actual criminal activity like violence, theft, and the like. In this case, the WFDF incentivized Cubans to not only risk their lives embarking on the dangerous journey through the Caribbean but created thriving, yet corrupt, black markets run by coyotes in both Cuba, Latin America, and in the United States.

Pew just published a graph showing how many Cuban migrants have entered the country since President Obama’s attempt to “thaw” relations with Cuba. Did Cuba’s communist regime all of a sudden become aggressive toward Cubans? Did they start mass murdering political dissidents? No, they didn’t.

Cubans, like most humans, started making decisions based on rational economic calculations. Similar to “Ricardian equivalence” where consumers take into account fiscal policies created by the government when they spend, (which I think is unrealistic from a normal consumer’s standpoint, but that’s another blog topic), they took into account President Obama’s political maneuvering with lifting the embargo. They realized that if Cuba was not an enemy of the U.S. anymore, this special migrant treatment would soon come to an end.

Politics, Economics, and Government-Granted Privilege

Economics and politics are almost always intertwined, especially for Cubans whom’s government controls most of the means of production on the island. So, saying that Cubans are just migrating to the U.S. in search of economic opportunity, like the rest of the world, can technically be translated into “political asylum.” But, what I have seen, along with most proponents of the removal of this policy, is that economic opportunity in the U.S., for Cubans, is not the same as it was for my grandparents who actually suffered through the revolution.

Though many have come here to reunite with family and seeking a better life, that better life often involves using government resources that are simply more abundant than those in Cuba. What’s more is that the new wave of Cubans come in and take advantage of their privileged access to welfare programs to finance their lives back on the island. Investigative reporting has shown “no agency tracks the scope of abuse” with “evidence suggesting it is widespread.” Some go back to Cuba and don’t come back while the U.S. continues to deposit welfare checks for up to two years.

Additionally, many of the new wave Cubans come here seeking “asylum” but do not hesitate when given the opportunity to go back to Cuba to visit “family”; they visit several times per year! If Cuba was really such a political nightmare for Cubans why do they go back? Just to give a point of reference my mother only visited Cuba after 17 years of having emigrated to the U.S. She had not seen her brother and his family in that entire time. My grandmother visited three years later, making it 20 years after the move. Both my grandfathers, who were both actual political prisoners (one for six years and the other for 16), and my other grandmother never returned to the island.

Now, this isn’t a jab at Cubans that do this, but it is a realization that institutions and incentives put in place by governments (or firms), need to be constantly scrutinized in order to make sure they are actually producing the appropriate outcomes. By removing the WFDF policy the unwanted outcomes that result from the blatant abuse of this government-granted privilege can begin to change.

My Stance

Just to give some kind of substantive stance on the issue, I think that the notion that we should equalize treatment to all countries is a good thing. However, I would have created an immigration policy that actually makes it easier for people that want to live in the United States to actually come here. This policy would, obviously, have to be coupled with a sizable reform to the welfare system. But, since that isn’t going to happen anytime soon our immigration policy will have to continue with its economically backward track record.

As of today, I have yet to be convinced of the virtues of communism and socialist economic planning.The communist regime led by Fidel Castro (and their 1959s version of “Occupy Wall Street”) has left Cuba stagnant and in shambles. Many islanders are undoubtedly oppressed by this ridiculous system. But, the same can be said for a multitude of countries around the globe. I am also not convinced of the economic soundness in keeping people out and putting up barriers to trade. If we want to lift the quality of life and well-being of people trade is the answer. By freely allowing the movement of goods, services, and people, good ideas will also go along for the ride.

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Published by Kevin D. Gomez

Kevin D. Gomez is an Instructor of Economics at Creighton University and Program Manager at the Institute for Economic Inquiry. He received his B.S. in Economics and Statistics from Florida State University and his M.A. from George Mason University. Trying to pay it forward by helping noneconomists make sense of the crazy world.
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